Endogenous Globalization and Income Divergence

Yoshiaki Sugimoto

No ECO2005/03, Economics Working Papers from European University Institute

Abstract: This paper develops a growth theory that accounts for the evolution of trade policy, underlying internal class conflicts, and global income divergence over the last few centuries. By analyzing political responses to the distributional effects of international trade, this paper finds a prominent interaction between trade policy and the pattern of economic development, and suggests that the nature of the interaction depends on a country's resource abundance and distribution. As shown by the example of Western Europe, land-scarce countries will reach a developed stage through a non-monotonic evolution of trade policy. In contrast, land-abundant countries, especially those with concentrated landownership, tend to fail to take o¤ because of landlords' opposition to industrialization.

Keywords: Trade Policy; Growth; Class Conflict (search for similar items in EconPapers)
JEL-codes: F10 F13 F43 O11 O40 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-dev and nep-pol
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